Junctionville, New York is a fictional town meant to honor author Clement Moore, who was born in New York. It is apparently a seaside town, as one little boy, Davy Thomas, is shown sitting on a seaside cliff dropping a drawing of Santa into the ocean. Its maritime nature may have been based on Newport, Rhode Island, where Clement Moore died.
Although the opening credits state that the story is "told and sung by Joel Grey," it is actually George Gobel's character who narrates the special. (Joel Grey "told" told the actual night before Christmas story)